In order to promote energy generation competition and enforce fair treatment of external users of the transmission system, the Federal Energy Regulatory Commission issued Orders 888 and 889 in April 1996. Among other requirements, Order 888 required all electric utilities to file an open-access transmission tariff (OATT). Order 889 defined how all participants in the electricity market should interact with transmission providers and provided the structure and function for open access same-time information system (OASIS). OASIS nodes are secure, web-based interfaces to each transmission system's market offerings and transmission availability announcements.
Non-discriminatory open access is required for an electric utility company's competitive generation business to sell at market based rates. The OATT (Open Access Transmission Tariff) is the body of rules that govern how wholesale transmission customers receive transmission service from an electric utility. These rules encompass not only the calculation of a formulary rate, but also all of the terms under which wholesale customers receive service.
Electric utility companies in the U.S. earn wholesale revenues by providing transmission service to wholesale customers under the terms of the FERC-approved Open Access Transmission Tariff (OATT). The categories of service under the OATT include network and long-term firm point-to-point service (service periods of one year or longer), short-term firm point-to-point service (daily, weekly or monthly service periods) and non-firm point-to-point service (hourly, daily, weekly or monthly service as available). Electric utilities also collect transmission revenues through grandfathered agreements pre-dating the OATT and other miscellaneous transmission services performed for other utilities.
The development, FERC filing and defense of the OATT rate has been accomplished in the past through the use of over 200 different spreadsheets and numerous manual processes. Since the inception of the formulary OATT in 2002, the demands of the OATT rate have increased. The old model technology was found to be no longer adequate.
Furthermore, over the past few years, there has been a dramatic increase in the scrutiny of the filings and in the number of questions that were received during both the Informational and True-Up filing informal review periods. The primary questions have come from the transmission network customers who have hired lawyers and consultants to handle the review process and work with the electric utility in reaching settlements on any issues raised. These review processes have become drawn out reviews most often resulting in lengthy settlement processes. They involve a lot of time and resources for an electric utility. There is no indication that the current environment will not continue in the future.
In any given calendar year, there are essentially three separate FERC OATT rate filings ongoing. These are calculation of the next year billing rate, the true-up of the past year's billing rate, and the implementation of the current year's billing rate. Because the informal review process has been extended far beyond the normal 90 day period due to the intense intervention by the network customers, an electric utility is most often dealing with data responses and analysis on concurrent filings at the same time. The technical system or the resources to adequately provide timely and accurate information did not exist.